Bitcoin (BTC) is having its third-best month in history, says the creator of a forecasting model that calls for a $100,000 price in 2021.
In a tweet on Feb. 14, PlanB, the analyst behind the stock-to-flow model, said many were ignoring just how successful February has been for Bitcoin.
February 2020 in top 3 BTC price months
“Few people realize we are currently in the third best #bitcoin month ever,” he summarized.
Attention this year has mainly focused on Bitcoin’s January gains. Year to date, BTC/USD has shot up over 40%.
Nonetheless, at $10,240, Bitcoin would have its third strongest month on record if it were to close at similar levels in two weeks’ time.
As PlanB noted, only December 2017 and June 2019 saw higher monthly closes, at around $13,880 and $10,760 respectively.
Bitcoin price six-year monthly chart. Source: TradingView
19% too optimistic?
Traders appeared unprepared for the extent of returns in 2020, while technical indicators succeeded at forecasting fresh volatility during local lows in December.
According to stock-to-flow, BTC/USD should trade at an average of $8,600 until May’s block reward halving — 19% lower than at present.
Thereafter, the model calls for rapid upward momentum, topping out somewhere towards the end of next year. Between then and around 2024, Bitcoin’s average price should be $100,000.
The eye-opening calculations revolve around Bitcoin’s status as “hard” money — the ratio of new Bitcoins compared to the existing supply is both low and impossible to manipulate. This leads to the frequent description of the cryptocurrency as being “digital gold.”
By contrast, fiat currency has an infinitely manipulable supply and loses its value consistently thanks to its lack of backing in gold or another “hard” resource.
